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Even in the consumer space, Forbes magazine reported that cell phone customers were responding to the economic downturn by dining out less frequently (88 percent), holding off on major purchases such as cars, appliances, furniture, and electronics (79 percent), driving less (57percent), and even buying fewer groceries (41 percent) But less than a third (32 percent) were cutting back on their cell phone spending in response to tough times An Accenture survey found 90 percent of people polled had no intention of dropping their cell phone services In spite of the meltdown, 2008 was a good year for RIM North America was the fastest-growing smartphone market, with a 68 percent increase RIM with Apple accounted for 70 percent of the total And sales continued to grow, even with the downturn and lower price points, because of replacement demand for the Bold and stronger than expected sales of the Storm Indeed, RIM found that at least 75 percent of Storm buyers were new BlackBerry users According to a RIM exec, People who love Storm usually come from the world of cell phones rather than BlackBerry Where a diehard BlackBerry user detests Storm because of the strange new keyboard experience and latency issues related to touch screen, cell phone users love it because cell phone keyboards are generally slow and hard to use Storm sales will continue to grow as more cell phone users switch over Best of all, their costs do not have to increase if they simply opt for cell access and skip data access Cell phone users are heavy SMS (text) users, so they have no dif culty texting with Storm
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Through all RIM s stages of growth, our success was a series of very successfully managed evolutions Everything was an evolution You just intensely manage what has to be done at that point in time, and that gives you better
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facts for the next situation you have to face Then every time you face a new circumstance, you have a better set of facts, and that leads to a more decent probability of success I don t think grandiose, easy plans are the route of many successful businesses Jim Balsillie After the Great Meltdown of 2008, Research In Motion still ruled the of ce as the monarch of mobile e-mail But RIM s aggressive move into the global consumer space was a different matter, and fraught with danger For one thing, prices and margins are lower in consumer land And marketing costs are higher Since 72 percent of the world s total mobile phone market is prepaid, RIM is having to customize offerings to a whole new set of customers Still, in 2009, consumers amount to more than half of new BlackBerry subscriptions This fact was starting to hit the bottom line; RIM s gross pro ts were down from 2008, even as sales were higher than expected Needham & Co tech analyst Charlie Wolf said he expected low-40s gross pro t to be a problem for RIM through 2010 As prices moved lower, RIM knew it would have to rely increasingly on getting cheaper and better devices to market and giving customers more value by promoting lifestyle applications that run on its planetary platform
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Mike Lazaridis felt RIM was on the right track by aggressively moving into the consumer space because the company was starting with a tried-and-true foundation: the of ce If you go back in history, just about every major consumer electronics technology in history started in the enterprise
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So everything from printers, fax machines, telephones, typewriters you name it, it all started in the enterprise And then as it became easier to manage, as it came down in price, as it became more ergonomic, what happened was all these businesspeople, who re also consumers when they saw it available in the store, for a price that they can have it in their home, they start putting fax machines in their home, they start putting PCs in their home, they start putting tape recorders in their home All of these technologies have their birthplace in business and BlackBerry s following that same path BlackBerry s really a product that has successfully commercialized the concept of the smartphone for business21 Jim Balsillie felt that the secret to RIM s success is that the company performed very well in building complete solutions as we interface everything We are an interface and we don t compete with the ecosystem We also have a carrier-channel strategy 22 In other words, RIM can handle corporate communications from A to Z and can deliver whatever devices its carriers can sell Most commentators were optimistic about RIM s chances in a market dominated by Finland s Nokia, which sold 153 million smartphones in 2008, giving it a 475 percent share, down from 508 percent a year earlier Gartner analyst Roberta Cozza saw RIM as the biggest winner in a slowing smartphone market, roughly doubling its market share from mid 2007 to 174 percent RIM continues to execute well at the consumer level, increasing its global market reach, said Cozza And RIM was nding new
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21 Natasha Lomas, RIM s Lazaridis on why Qwerty s still working ZDNet News: May 16, 2008<*> 22 Damian Koh, The Storm is a Netbook, says RIM s founder CNET Asia, December 30, 2008<*>
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